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An analysis from The Australia Institute accuses Scott Morrison of planning to exploit a “pollution loophole” equivalent to about eight years of fossil-fuel emissions from the rest of the Pacific and New Zealand.

The “loophole” is using Kyoto credits to help the government meet its emissions reduction target.

The progressive think tank issued its salvo ahead of the Pacific Island Forum in Tuvalu, which Morrison is attending and starts today.

Anxious to sandbag the Australian government against criticism over its climate policy from island countries, for which the climate change issue is major, Morrison has announced Australia is redirecting $500 million of the aid budget over five years to go to “investing for the Pacific’s renewable energy and its climate change and disaster resilience”.

But Tuvalu’s Prime Minister Enele Sopoaga quickly said the money should not be a substitute for action.

“No matter how much money you put on the table, it doesn’t give you the excuse not to do the right thing,” he said on Tuesday.

“Cutting down your emissions, including not opening your coal mines, that is the thing we want to see,” he said.

Fiji’s Prime Minister Frank Bainimarama said this week: “I appeal to Australia to do everything possible to achieve a rapid transition from coal to energy sources that do not contribute to climate change”.

Morrison said on Tuesday: “Australia’s going to meet its 2030 Paris commitments. Australia’s going to smash its 2020 commitments when it comes to meeting our emissions reduction targets. So Australia meets its commitments, and we will always meet our commitments. And that is a point that I’ll be making again when I meet with Pacific leaders.”

Morrison confirmed before the election that Australia would use credits from overachieving on its Kyoto 2020 targets to meet its 2030 emissions reduction target.

The Australian Institute said: “If Australia uses this loophole, it would be the equivalent of about eight times larger than the annual fossil fuel emissions of its Pacific neighbours.”

Australia intends to use 367 Mt of carbon credits to avoid the majority of emission reductions pledged under its Paris Agreement target. Meanwhile the entire annual emissions from the Pacific Islands Forum members, excluding Australia, is only about 45 Mt.

The institute’s director for climate change and energy, Richie Merzian, said the government’s plan to use Kyoto credits was an insult to Pacific islanders.

“You can’t ‘step up’ in the Pacific while stepping back on climate action,” he said.